Fake Exchange Shops in Hong Kong Scam $1.9 Million from Cryptocurrency Investors

Cryptocurrency Investors in Hong Kong Fall Victim to Elaborate Scam

A sophisticated scam targeting cryptocurrency investors in Hong Kong has resulted in losses totaling HK$14.8 million (US$1.9 million) during the first nine months of the year.

The victims were duped into carrying out transactions at fake exchange shops in Kowloon West, where scammers baited them with favourable exchange rates and lured them into making additional investments.

A Successful Trap in Sham Shui Po

In one of the most significant cases, a 43-year-old businessman fell victim to a scheme after making two legitimate transactions of HK$400,000 and HK$800,000 in exchange for Tether coins at what appeared to be a "cryptocurrency exchange store" located in a shopping centre in Sham Shui Po.

Street of Sham Shui Po

He was eventually scammed out of HK$4 million during a third transaction earlier this month.

According to Senior Inspector Leung Wai-hin from the Sham Shui Po district crime squad, the victim became suspicious when, during the third transaction, the shop's receptionist claimed she needed to count the money and disappeared into a separate room.

"After the victim handed over the cash to a female receptionist at the counter, she falsely claimed she needed to count the money and exited into a separate room," Leung explained.

Realisation Too Late: The Shop's Doors Were Locked

Sensing something was wrong, the businessman attempted to leave the shop but discovered he was locked inside.

Feeling trapped, he immediately called the police.

Despite the quick response, the scammers had already fled with the money by the time officers arrived.

Surveillance footage later revealed two suspects—a man and a woman—escaping the scene.

Arrests Made, But Key Suspects Remain at Large

Following the investigation, police arrested two male suspects, aged 23 and 30, in connection with the scam.

Devices confiscated by police as evidence.

However, the female receptionist, along with other individuals believed to be involved, remains at large. Authorities are intensifying their search to bring the perpetrators to justice.

Sources close to the investigation have revealed that the mastermind behind the scam rented the store in Sham Shui Po around eight weeks prior, paying HK$6,000 a month.

According to a police source,

“To evade arrest, those behind such scams usually pay individuals such as drug addicts to rent these shops and recruit receptionists online to manage the shop.”

Bogus Banknotes and Fake Transactions: A Deceptive Setup

The scam wasn’t limited to physical cash transactions.

In several instances, fraudsters used fake banknotes to trick victims into transferring digital currencies, such as Bitcoin or Tether, to designated e-wallets.

In one tactic, scammers showed victims what appeared to be large bundles of cash, but upon closer inspection, these notes were revealed to be counterfeits.

A police insider explained,

"Except for two genuine banknotes placed on the top and bottom of each bundle, the others are bogus bills, known as training notes."

These notes, which closely resemble authentic banknotes, are typically used by mainland Chinese bank employees for training purposes and lack crucial security features such as watermarks.

A Growing Problem in Kowloon West

This case is only one in a string of similar incidents reported in the Kowloon West region.

Between January and September, twelve other cases involving cryptocurrency traders were reported, with losses amounting to HK$10.8 million.

Chief Inspector Cheng Ki-fung of the Sham Shui Po crime unit emphasised the importance of vigilance when engaging in cryptocurrency transactions.

He urged residents to thoroughly research the reputation of shops before completing any deals.

To avoid falling victim to such scams, Cheng advised that investors only deal with reputable exchange services and verify the legitimacy of stores offering cryptocurrency transactions.